But there is disagreement about that. The state tax commissioner says the promotional items should be taxed because the Reds bought the items as giveaways and they aren’t selling them with tickets.
The three-member Ohio Board of Tax Appeals concluded last June that the Reds have “not provided this board with competent and probative evidence in support of the position that it does not owe the assessed tax.” The case is now before the Ohio Supreme Court.
For the Reds, tens of thousands of dollars are at stake — and maybe more if the tax commissioner seeks back taxes. Ohio has a state sales tax rate of 5.75 percent, and Cincinnati imposes a 0.75 percent levy on top of that.
What taxes businesses pay is a big issue, of course, and baseball teams maintain their memorabilia are like "grocery bags or Happy Meals," Jonathan Entin, professor emeritus of law and adjunct professor of political science at Case Western Reserve University, wrote in a blog at the web site, The Conversation. "The Reds say they factor the cost of those items into their ticket prices for every game during the season, so they should not have to pay a separate sales tax when they purchase them to give to fans as promotions," Entin wrote.
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It’s not clear when the case will be heard. The Reds on Feb. 21 had their motion granted for an oral argument before the whole court, but no hearing date has been set.